Credit Score Boost – Industry Outlook

FHA Raises Loan Limits for 2019 –Based on the Federal Housing Administration’s announcement, most of the country will see an increase to loan limits this year. The loan limit for lower-cost areas will be set at $314,827—or 65 percent of the national conforming loan limit of $484,350. In high-cost areas, the new FHA limit for 2019 will increase to $726,525, up from $679,650. The FHA sets single-family loan limits at 115 percent of median home prices, which is subject to a ceiling on limits. For the past few years, the FHA has been increasing loan limits in a greater number of counties. In 2016, the FHA raised loan limits for 188 counties. In 2019, 3,053 counties will see an uptick in FHA loan limits. The new loan limits took effect on January 1st.

Median Down Payments Reach Nearly 15-Year High – According to ATTOM Data Solutions, home buyers are bringing more money to the closing table. The median down payment on single-family homes and condos purchased with financing in the third quarter was $20,250 which is up 7 percent from the previous quarter. The median down payment as a percentage of the median home sales price was 7.6 percent in the third quarter, the highest percentage since the fourth quarter of 2003.

Credit Score Boost– Based onExperian’s announcement, millions of consumers may soon see a boost to their credit scores, which could help when applying for a mortgage. The change will give consumers the option to have their cellphone and utility payments factored into their credit scores early this year. About 46 million consumers who have limited credit data could instantly see an increase to their credit scores from the new data being added in, according to Experian. This marks the first-time consumers will be able to have such data factored into their credit reports and scoring. It follows on the heels of several other changes. Fair Isaac Corp., the creator of the FICO credit score, will soon be launching a new credit score with Experian that will take into account a consumer’s history managing their checking and savings accounts. That move also could give consumers a boost to credit scores for those who at least keep several hundred dollars in their accounts and don’t overdraw. Also, all three major credit reporting firms, Experian, Equifax, and TransUnion have all recently removed negative information, like tax liens and judgments, from consumers’ credit reports.

A Welcome Sign for Housing: Another Boost in Home Sales – According to the National Association of REALTORS® recent report, for the second consecutive month, existing-home sales rose, as three of the four major U.S. regions saw an increase in sales last month. Total existing-home sales, which are completed transactions for single-family homes, townhomes, condos, and co-ops, rose 1.9 percent from October to a seasonally adjusted rate of 5.32 million in November. “The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago,” says Lawrence Yun, NAR’s chief economist. “Rising inventory is clearly taming home price appreciation.”

Here’s a closer look at some of the leading indicators in existing-home sales in November:

Home prices: The median existing-home price for all housing types was $257,700 in November, up 4.2 percent from a year ago.

Inventories: Total housing inventory fell to 1.74 million in November, but is higher than the 1.67 million from a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace.

Days on the market: Forty-three percent of homes sold in November were on the market for less than a month. Properties stayed on the market, on average, for 42 days in November, up slightly from 40 days a year ago.

Distressed sales: Foreclosures and short sales comprised just 2 percent of sales in November, the lowest since NAR began tracking such data in October 2008. A year ago, distressed sales compromised 4 percent of home sales.

All-cash sales: All-cash transactions accounted for 21 percent of sales in November, down from 22 percent a year ago. Investors make up the bulk of all-cash sales. Individual investors purchased 13 percent of homes in November, down from 14 percent a year ago.